Individual investors are Tokai Rika Co., Ltd.'s (TSE:6995) biggest owners and were rewarded after market cap rose by JP¥7.5b last week

Key Insights

• Significant control over Tokai Rika by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 9 investors have a majority stake in the company with 51% ownership
• 25% of Tokai Rika is held by Institutions

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A look at the shareholders of Tokai Rika Co., Ltd. (TSE:6995) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 39% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, individual investors collectively scored the highest last week as the company hit JP¥233b market cap following a 3.3% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Tokai Rika.

View our latest analysis for Tokai Rika

What Does The Institutional Ownership Tell Us About Tokai Rika?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Tokai Rika. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Tokai Rika's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Tokai Rika. The company's largest shareholder is Toyota Motor Corporation, with ownership of 35%. For context, the second largest shareholder holds about 2.7% of the shares outstanding, followed by an ownership of 2.5% by the third-largest shareholder.

We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Tokai Rika

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our data suggests that insiders own under 1% of Tokai Rika Co., Ltd. in their own names. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around JP¥232m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Tokai Rika. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

We can see that public companies hold 35% of the Tokai Rika shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Tokai Rika better, we need to consider many other factors. Be aware that Tokai Rika is showing 1 warning sign in our investment analysis , you should know about...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.